Trump Administration Hints At Support For A Smaller Unemployment Boost

The Trump administration may be open to continuing to pay higher unemployment benefits to those put out of work during the coronavirus pandemic when the $600 boost currently in place expires at the end of next month.

Republicans in Congress have been dead set against keeping the extra $600, but U.S. Labor Secretary Eugene Scalia suggested Tuesday that a lower sum might be appropriate.

“There’s been discussion of perhaps having a smaller benefit ― not $600, but perhaps $250,” Scalia told the Senate Finance Committee in response to a question from Sen. Bill Cassidy (R-La.) about whether states would be able to gradually phase down the $600.

Congress added the extra $600 per week to unemployment insurance in March to help people ride out the coronavirus pandemic at home, since businesses shuttered in order to slow the spread of the virus that has killed more than 110,000 Americans. They also added three months to the duration of benefits and expanded eligibility, policies that will continue through the end of the year.

It’s unusual for Congress to boost the dollar amount of weekly benefits, which are paid by states. In past recessions, Congress has simply added extra weeks of federally funded benefits for workers who run out of state benefits.

Democrats think the extra money should remain in place until the economy recovers, but have hinted they could accept a lower sum. Lawmakers came up with $600 because it’s roughly the difference because the average unemployment payment of about $350 and the average weekly wage of about $950.

Republicans have been protesting the extra money from the start, saying it would discourage people from returning to work even though public health officials say social distancing is the only way to slow the spread of the virus. In both the House and Senate, GOP lawmakers have proposed “return to work” bonuses in lieu of keeping the higher unemployment compensation.

The Trump administration has bragged about its effort to “raise unemployment benefits,” but the Labor Department has encouraged states to disqualify anyone who refuses to go back to work, and even workers at higher risk of illness have seen their benefits canceled.

In May, payroll employment unexpectedly rose by more than 2 million, suggesting the higher payments didn’t hamper hiring the way Republicans feared. The unemployment rate fell from a historically high 14.7% to a still-historically high 13.3%.

Sen. Ron Wyden (D-Ore.), the committee’s top Democrat, said he’d heard his Republican colleagues say they supported halving the $600 boost.

“Big corporations are getting trillions of dollars in support to weather this crisis, but Congress is going to start pinching pennies when the little guy needs help?” Wyden said. “The system is already rigged to favor the powerful and wealthy. The Congress certainly should not stack the deck any further.”

Committee chair Chuck Grassley (R-Iowa) said that with states reopening and unemployment falling, “we need to shift our focus to helping people safely return to work, making sure businesses are able to come back quickly and put the country back on a path to economic growth.”

Scalia emphasized that the extra cash has been a good policy, even if he supports phasing it down.

“It was the right thing to do, at that time, in a closing economy, and I’m mindful of the concerns and I heard members express them at the time that that might result in some people turning down work,” he said.